Updated after Wall Street closes
New York (awp / dpa) – The toughening of the tone of the US Federal Reserve sent European markets down sharply on Thursday, with US markets remaining volatile but catching their breath after their tumble the day before.
Undecided after a session of strong fall, Wall Street ended in small decline with the Nasdaq at -0.13%, the S&P 500 at -0.10% and the Dow Jones at -0.47%.
In Europe, Paris fell 1.72%, London by 0.88%, Frankfurt by 1.35% and Milan by 1.80. In Asia, Tokyo had its worst session in more than six months, losing 2.88%.
This trend reversal from the records reached in the first days of the year comes from the publication of the minutes of the last meeting of the Federal Reserve’s (Fed) monetary policy committee. They bear witness to its determination to tackle inflation head-on, which has reached decades-old records in the United States.
The members of the Fed have indicated, in unequivocal language, that they now plan to raise the institution’s key rate earlier and more often than expected.
In addition, the Fed report is now talking about starting to reduce the institution’s balance sheet from the first rate hike, which caught operators by surprise.
For Gregori Volokhine of Meeschaert Financial Services, “the rate hike was already largely integrated by the markets”.
“What was not yet in the minds of investors is the reduction of the Fed’s balance sheet, but this corresponds to a small monetary tightening more,” he said.
US economic data has been fairly favorable, which has helped stem the turnaround of investment out of tech. Weekly jobless claims remained at a very low level during the last week of 2021, while increasing slightly as employers face a labor shortage. The official monthly US employment report will be scrutinized on Friday.
Rates on 10-year US Treasuries climbed to 1.75%, the highest since the start of the pandemic, to settle around 9:00 p.m. GMT at 1.72% from 1.70% the day before .
Tech still in shock
Tech stocks, which need low interest rates to finance their growth, were overlooked by investors on Thursday.
In Paris, Capgemini fell by 4.37%, Dassault System by 3.65% and Teleperformance by 4.08%.
In Frankfurt, the software designer SAP lost 2.79% and on Wall Street, Netflix was down 1.63% and Apple by 1.12%.
Banks going against the grain
Conversely, bank stocks, which are benefiting from the rise in interest rates, managed to get out of the fray.
In London, Lloyds Banking climbed 2.35% and Standard Chartered by 3.72%. In Frankfurt, Deutsche Bank took 2.53%. In Paris, Societe Generale gained 1.86%, after an acquisition in the leasing sector.
In general, the stocks of the traditional economy (industry, automobile, raw materials) were preferred by investors at the start of the year.
Another sharp rise in oil, bitcoin does not rebound
Oil prices accelerated their rise Thursday after having already significantly increased the day before, while the situation in Kazakhstan, a member of OPEC +, raises fears of a possible drop in supply.
The price of a barrel of North Sea Brent for delivery in March climbed 1.47% to $ 81.99 in London. That per barrel of West Texas Intermediate (WTI) for delivery in February gained 2.06% to 79.46 dollars.
The dollar strengthened a little against the euro at 1.1289 dollars per euro (+ 0.22% at 8:00 p.m. GMT).
After its sharp fall on Wednesday, bitcoin curbed its loss to $ 43,383 (-0.28%).
Bur-fs-vmt / nth